Does Anyone Know the True Cost of EV Batteries? (Not Really)

In its Prius PHV, Toyota uses a different scheme: Three fans for air circulation, additional ductwork, and 42 sensors placed around the battery to monitor temperature. All makers of production EVs also employ electronic battery management systems and multiple microcontrollers to track the operation of the battery pack at every moment. Finally, they design the pack for manufacturability, so it can be more easily installed under the floor or elsewhere, rather than in a trunk or a back seat, as it might be in a backyard EV conversion.

The bottom line is that the cells are only a part of the cost of the battery pack. A 2009 report written by the National Research Council concluded that "the cost of assembling the pack is approximately the same as the cost of the cells." In other words, multiply the cell cost by two and you'll be closer to the pack cost. So, in the theoretical case of the $285/kWh cell mentioned earlier, the pack cost could easily be $570/kWh.

Still, that's not the end. There's the cost of doing business, including warranties, failures, and liabilities. "There's one price when you buy something and another when you fit it into the car," Swan told us. "The accountant walks in and says, 'We'll have so many failures and here's what it's going to cost us.' "

If you consider yourself a no-nonsense engineer, that might sound frivolous. But lithium-ion batteries have a history of overheating, and lawyers take a dim view of it when cars roll down the road like flaming chariots.

Two weeks ago, experts at Lux Research, Pike Research, and the Center for Automotive Research told us they estimate today's OEM battery costs at $800 to $1,000/kWh. In June of this year, Toyota engineers set the bar even higher. "Extra battery is about $500 per design mile, roughly speaking," noted Bill Reinert, national manager of advanced technology vehicles for Toyota. That means an extra ten miles of battery power equates to $5,000 on the price of the car. If you do the arithmetic (assuming about three miles per kWh), today's battery costs could be interpreted as $1,500/kWh.

To be sure, others have said that the costs are much lower. Many claim the Nissan Leaf batteries are now under $600/kWh. Two years ago, Tesla told us that the cylindrical 18650-style batteries in its Roadster cost $500/kWh.

The bottom line is, no one knows for sure. What we do know, however, is that the number we pull off the Internet isn't the same as an automaker's number. As amazing as some of the backyard engineering is (we wrote about it here), the economics of it aren't the same as the automaker's economics. We also know that the real experts aren't trying to spread fear, uncertainty, or doubt. Their cost numbers aren't part of a grand conspiracy.

Correct me if I am w2rong but the real heart of the problem with EV is all about the batteries and the controls. The rest of the car is pretty much the same so the Energy storage aspects are the real issue.

Electric motors will get some refinements notably in terms of the electric wheel and traction and braking controls built in to the system. some other issues with weight and materials come into play as well but for the most part these are the same regardless of the power plant for the car. But the real issues are related to the battery and the control systems.

And what we see being discussed is a technology and manufacturing issue, cost. What will it take to bring down the cost, no matter what it really is now it is too high. Large scale manufacturing and solid demand will reduce costs. Improved battery chemistry and manufacturing of the cells will bring down costs. The control systems once they are commoditized and in good demand will bring down costs.

As demand ramps up for the energy storage and control systems we can expect this to drive down costs. So expanding the applications for these kinds of distributed power storage units will improve demand.

Taking advantage of "time of use" rates for electricity in commercial buildings and residential applications might help drive demand. Right now, the ROI is insufficient to justify the investment. Imagine if it became very very attractive to invest in a battery storage system for your home and this could be carried over to the EV space.

I see increasing demand as one of the best ways to drive down costs. Am I wrong?

TJ: When we last checked, replacement battery costs for the Volt and Leaf were still unavailable. The old Prius battery, which used a nickel-metal hydride chemistry and was rated around 1.5 kWh, cost about $2,500. It's worth mentioning, however, that in 2008, Bob Lutz of GM suggested that the Volt's initial price factors in the cost of battery replacement, which again makes it difficult to figure out what these packs actually cost.

From what you've said, replacing the power storage system in a car would mean replacing the pack, not the cells. It comes out as a unit, goes in as a unit. So is there pricing from third-party suppliers of the battery packs yet to prove the $1000 range?

The bottom line is that I believe the experts who say EV batteries are running $800 - $1,000/kWh. Batteries are more than cells and the costs mount up. Sure, no one can say EXACTLY what they cost is. But the 20 or so experts that I depend on have been around the business a long time. They put their names and their companies' names on their estimates. They're not sitting in front of their computers late at night and typing anonymous thoughts under the guise of pseudonyms. And they're not part of a conspiracy that's trying to undermine the electric car market. When Toyota says that the battery costs $500 per additional mile, you can believe it must be expensive.

Chuck, just following the numbers is enough to make one's head spin. So what's the bottom line here in terms of the argument? A feeling that automakers are using higher numbers to justify higher prices on EVs, while the other side argues that the battery costs aren't that high, thus shouldn't justify higher vehicle costs?

A few weeks ago, Ford Motor Co. quietly announced that it was rolling out a new wrinkle to the powerful safety feature called stability control, adding even more lifesaving potential to a technology that has already been very successful.

A well-known automotive consultant who did an extensive teardown of BMW’s i3 all-electric car said its design is groundbreaking in multiple ways. “We’ve torn down about 450 cars, and we’ve never analyzed anything like this before.”

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